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The Foreign Direct Investment (FDI) fell by 58 percent during the last fiscal year (FY15), mainly due to political unrest and energy crisis. Economist said that in the absence of privatisation proceeds, it was already being expected that FDI in FY15 will be lower than previous year. "Although the government successfully managed to borrow some $1billion through the auction for Sukuk bond in the international market, however it was unable to execute the privatisation of OGDL due to declining oil prices in the world market," they added.
They said ongoing energy crisis, poor infrastructure, political uncertainty and security issues are major hurdles in the inflow of FDI, therefore government needs to take more steps to resolve these issues. "Long-term investment policies are required to attract foreign direct investment in the country, they added. The State Bank of Pakistan (SBP) Tuesday revealed that FDI posted a 58.2 percent decline during the July-June of last fiscal year (FY15). Pakistan attracted FDI amounting to $709 million in FY15 compared to $1.698 billion in FY14, depicting a decline of $989 million. During the period under review, the country received FDI inflows amounting to $2.279 billion against outflow of $1.57 billion.
Moreover, the second component of foreign investment in Pakistan, ie, portfolio investment continued to post positive growth on the back of better return on stock market. Portfolio investment rose 48 percent during the period under review. Overall portfolio, investment reached $924 million in FY15 compared to $623 million in FY14, showing an increase of $302 million. Overall, foreign investment in Pakistan, comprising FDI, portfolio investment and foreign public investment registered a decline of 42 percent to reach $1.87 billion in July-June of FY 15 against $ 4.436 billion in the corresponding period of FY14.

Copyright Business Recorder, 2015

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